Many of us are in the habit of changing mobile, internet, TV and utility providers to get the best deals but very few of us consider changing bank accounts. So are you getting the most from your bank or is it time to switch?
Understanding the difference between various accounts, even with the same bank, used to be difficult, and the actual process of moving your money was awkward and time consuming. Until August 2013, 75% of Britain’s 46 million current accounts were with just four banks, and they wanted to keep it that way! This changed in 2013 with the rollout of the Current Account Switch Service, and now an estimated 2.5 million Brits have switched accounts. The process of moving may be faster and more transparent, but how can you tell what is the right bank account for you?
What Features Do You Need?
Not all bank accounts are created equal. Think about how you will use an account. If you intend to pay your bills from it by direct debit, consider an account which offers cashback or other incentives for doing so. Will you be withdrawing money from an ATM? Do you want a bank which has branches that are open on weekends, and is a UK call centre important to you? Some banks offer packaged extras, such as travel or car insurance, for a monthly fee. Compare these with independent offers to see if they are good value for you.
Are You a Student?
Banks and building societies try to entice students to open accounts hoping that things like an interest free or low-interest overdraft, or discounted travel, will help them gain customers for life.
Read the Fine Print
The benefits of switching will be spelled out in large, bold writing, but the fees and penalties will not be. Read the details carefully, checking to see whether there are penalty fees if you don’t deposit a specific amount each month, or higher than average overdraft rates. You might find that short term benefits are outweighed by having to pay if you use a different bank’s ATM, for example.
Don’t be Dazzled by Sparkle
Just because a bank offers a wide variety of extras doesn’t mean it is right for you. There’s no point paying for a benefit you don’t use. If you don’t need an overdraft facility, maybe you are better off choosing a bank which gives a higher rate of interest, but no credit. If you often have money left over at the end of the month, focus on rates of interest; but if you frequently dip into your overdraft, applicable charges will be more relevant for you.
Do You Need to Switch?
If you’re happy with the service and benefits you currently receive from your bank account, there’s no need to switch for the sake of it. Should you decide to switch, it should take no more than seven working days under the Current Account Switch Service. Your new bank will liaise with your old one to make sure all payments are set up correctly on your agreed date, ensuring an easy switch.